ONE Gas, Inc. (NYSE:OGS) Q3 2023 Earnings Call Transcript

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Curtis Dinan: So let me just go state by state. So the capital spending, everything we spend in Texas qualifies for a GRIP filing. And if you saw the cadence that we had here in ’23, in February, we filed Central Tax, in March we filed West Tax and then we have the rate case in RGV. Instead of the rate case next year, we would have a COSA filing. And you can look at cadence in prior years to have a sense of that. In Oklahoma, all of our capital has recovered through the PBR filing, which we typically do at the end of February. And in Kansas, the capital that we’ve spent in 2023 through the end of June was a part of the filing that we did just a couple of months ago in August. Our next filing for GSRS in Kansas would be next August. You can do one every 365 days, no sooner than that. And that will pick up all capital spending through June 30 of next year – all capital spending that qualifies for that mechanism, which is the majority of our spending in Kansas.

Caron Lawhorn: And to address your question on the refinancing. I really don’t have much more to add than what I said in the comments. Now, we’re looking at all factors with the rates and spreads where they are, different tenors, how that impacts our maturity profile, how it impacts our capital structure, which supports our regulatory construct, all of those things are things that we are looking at and balancing as we refinance that debt.

Sid McAnnally: Yes. Tanner, the only thing I would add is to speak to how we have prepared and are preparing for the challenges that we think we’ll face going forward. We have increased the capacity of our regulatory group, recognizing that the cadence of rate activity will increase and that started last year, really early last year. We’ve also done the same when you look at the financial side of the house. So we think we’ve built capacity to take on the challenges in the short term that continue to support the opportunities that we have in the long term.

Tanner James: Understood. Thank you. And then, with commodities declining here, how do you estimate the customer build trajectory for the upcoming winter, ’23 to ’24?

Curtis Dinan: Jameson – or Tanner, excuse me. We’ve seen just on average across our territory. Last year, we saw an average bill of somewhere in the $81 range per month. And this year, we see somewhere around maybe 8% to 10% decrease from that.

Tanner James: Great. Thanks. And then lastly, in the press release, you called out the year-to-date weather impact, net of normalization. Have you – how do you quantify that on an EPS basis? And then what are the – are there any offsets built into your guidance for that?

Caron Lawhorn: So as we plan guidance for the year, we anticipate normal weather, and we are largely protected from those big swings because of our weather normalization mechanism. So it’s because of that protection, we don’t see a lot of volatility associated with it. I don’t – on top of my head, I don’t have the EPS impact of that.

Tanner James: Great. Thank you very much.

Sid McAnnally: Thank you for the questions.

Operator: We have a follow-up question from Gabe Moreen with Mizuho. Your line is open.

Gabriel Moreen: Thanks, everyone. My question actually got answered. Thank you.

Sid McAnnally: Thank you, Gabe.

Operator: This concludes our Q&A. I’ll now hand back to the management team for closing remarks.

Erin Dailey: Thank you again for your interest in ONE Gas. Our quiet period for the fourth quarter starts when we close our books in early January and extends until we release earnings in late February. We’ll provide details on the conference call at a later date. Have a great day.

Operator: This concludes the ONE Gas 2023 third quarter earnings conference call and webcast. You may now disconnect.

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